Check Out the CEO's Paycheck

As images of holiday bonuses dance through our heads, we thought it was a good time to look at the compensation of a handful of the semiconductor industry's CEOs. We found packages that ranged from less than $3 million to nearly $20 million.

To put that in perspective, the average pay of 327 CEOs of the biggest companies in the U.S. was $12.3 million in 2012, including salaries, bonuses, perks, stock awards, stock options and other incentives. That's according to research conducted by the AFL-CIO. The worker's union also reported that the CEO of an S&P 500 Index company made, on average, 354 times the wage of a rank-and-file U.S. worker in 2012.

There is no legislation capping pay for executives in what IC Insights says are the countries that produce most of the world's semiconductors -- Japan, South Korea, Taiwan and the United States. However, several other countries are considering limits to executive pay.

In the U.S. the Securities and Exchange Commission proposed in September a new rule that would require public companies to disclose the ratio of the compensation of its chief executive to the median compensation of its employees.

In November, Swiss voters rejected a proposal to curb executive compensation. The "1:12 -- for fair wages" initiative, which proposed capping executive salaries at 12 times the level of the lowest paid employee, was rejected by 65.3 percent of voters. It failed to win majority support in any of the country's 26 districts, CNN reported .

European Union officials are working to limit bonuses for bankers earning more than 500,000 euros ($678,000) a year, limiting bonuses to twice the executive’s annual salary. The proposal would affect more than 35,000 bankers around the world and is being challenged by the British government.

In Germany, Europe’s largest fiscally solvent country, officials vowed to take up pay inequity in the next parliamentary session. Chancellor Angela Merkel stated that “exorbitance cannot be allowed in a free and socially minded society.”

As of September 2013, CEOs of French state firms cannot make more than 20 times the salaries the lowest-paid employee earns. Thus salaries are capped at around $600,000, NPR reported. Meanwhile, Dutch officials announced new legislation that would cap golden parachutes at a maximum of 75,000 euros ($98,000).

With this perspective we invite you to click through the following pages to read what some of the top semiconductor companies are paying their chief executive officers.

Yes they are big, but not nearly so breathtaking as some high tech execs such as Oracle's Larry Ellison who reportedly took home nearly $100 million in 2012. Ka-ching!

This could be THE big political challenge of the next several decades, starting with getting support and recognition of the need for reasonable reform of the existing system, since there's no "natural representation" of the middle class (although clearly the Tea Party is far from hostile to them). According to the "political elites" if you're a moderate on the left, the union system is supposed to "provide all the answers to your problems" and if you're not a union member then you're PART of the problem! If you're further to the left then you're an advocate of class warfare and income redistribution and the only possible "reform" to capitalism that's acceptable is to tear it up and start over. If you're a moderate on the right it's almost "politically incorrect" to even bring up the topic that the system is less than fair, if you're further to the right then "reform of the system" probably consists mostly of an agenda to get rid of unions altogether and to radically shrink government regardless of the consequences. And of course it's not at all helpful that the left represents the Tea Party as a social club of racist, homophobic, gun-loving redneck "haters"!

The closest that the political consultants have come to identifying the middle class as a constituency is probably "soccer moms" and that's clearly more than a little off the mark. And economists have for decades considered the measurement of economic "efficiency" nearly as important as profit itself, and historically that was OK because there were always new jobs coming to replace the ones that were lost. They never want to discuss economist David Ricardo's finding that "labor arbitrage" (which we see all the time in the form of offshoring, outsourcing and bringing in immigrants on visas and paying them very low wages) is such a fundamental disturbance to the economic system that it renders most economic models essentially worthless. Yes it's going to be a very long time before any kind of meaningful economic "equlibrium" is established, whether it's imposed by some sort of government decree or by the market itself.

Postscript: It seems there is starting to be some general interest in the topic of artificially low wages among tech workers, see http://www.cnbc.com/id/101312871 in which an analyst actually downgrades Apple and Amazon on "moral and ethical grounds".

Basically if most of the people are working (hard) and over the years a higher and higher percentage of the total wealth of the nation ends up to be possessed by fewer and fewer people then something is wrong, isn't it ? I wouldn't point a finger at somebody particular. It's not an evil club of old men, it's just the "system" itself which makes that happen. Unfortunately the consequences are very unpleasant.

It seems we all agree that CEOs are overpaid and this is not fair...perhaps only some CEOs will object to that statement ;-)...but they probably don't post at EE Times...the question then becomes what can be done about this? Kris

Still, having the CEO of a company with ~100,000 employees or more paid a few hundred time more than the average worker means that it's not so much a question of his salary affecting negatively the workers' salaries. It's more a question of basic fairness, common sense, and you know, decency. Those intangibles.

One problem with the concept of "responsible to the shareholders" (owners of the company), is as Bert suggests, many of those shareholders are looking for quick returns and may in fact be shareholders only for a very short time. As an "owners," that type of shareholder has little regard for the company's health or future plans, and his behavior more closely resembles that of a gambler. Executive responsibility must -- and therefore usually does -- extend beyond the stock price movement this week or this quarter.